Headlam Regulatory News (HEAD)

17 May 2013

Interim Management Statement

Headlam Group plc ("Headlam"), Europe's leading floorcoverings distributor, announces its Interim Management Statement for the period from 1 January 2013 to 30 April 2013.

Group revenue increased by 0.1% during the first four months compared with the corresponding period last year.

As reported previously, our trading experience in the UK during the first two months of 2013 was undermined by unfavourable weather and increased market challenges. However, an improved performance during March and April allowed a degree of recovery and on a like for like basis we ended the first four months down 1.1% on the previous year.

Revenues from our Continental European businesses, measured in constant currency, reduced by 2.3% during the first four months with the sterling translation showing a decline of 0.1% because of sterling's depreciation against the euro and Swiss franc.

The UK market can currently best be characterised as one which lacks any signs of sustained growth and remains highly competitive. Similarly, on the Continent, our businesses are encountering markets which are equally testing and none more so than the Netherlands, where the market has contracted sharply.

However, notwithstanding these difficult trading environments, our businesses have managed to improve or sustain their gross margins. In the UK, this has resulted in a reversal of the 50 basis points decline that was evident during the first four months of 2012 and on the Continent, overall gross margin has improved by 30 basis points.

During the first four months of 2013, there has been no significant change in the group's financial position compared with the position at 31 December 2012.

Tony Brewer, Headlam's Group Chief Executive, said:

"The improvement in UK trading, evident during March and April, has continued into May with revenue up on last year whilst on the Continent, the performance in May is broadly consistent with the previous four months.

The revenue deficit at the start of the year has increased the challenges associated with delivering the group's 2013 financial objectives but our businesses remain focused on improving the group's trading position across its various markets."

End

Enquiries:

Headlam Group plc

Tony Brewer, Group Chief Executive Tel: 01675 433000

Stephen Wilson, Group Finance Director